At the end of September 2007, India's external debt stock stood at US $ 190.5 billion (Rs.757,967 crore), increasing by an amount of US$ 9.9 billion (5.5 per cent) over the quarter (Table), of which around US$ 5 billion is explained by valuation change arising out of weakening of US dollar against major international currencies and Indian Rupees. The external debt stock series stand revised from March 2005 due to the inclusion of suppliers' credits of less than 180 days under short-term debt. (For details see Annex I of the full Report.)

During the half year, April-September 2007 external debt stock in terms of US dollar has risen by US$ 21 billion (12.3 per cent), of which US$ 7 billion is accounted for by the depreciation of US dollar in the international market. In terms of rupees, the increase in external debt of India during this period was only Rs. 17,868 crore or 2.4 per cent. The rise in external debt outstanding over the quarter ending September 2007 was essentially brought about by a rise in external commercial borrowings, NRI deposits, multilateral debt and short term debt.

Table: India's External Debt
(US $ million)
Items	Debt Outstanding at end			Variation
				Absolute		Per cent
	March 2007 R	June 2007 R	Sept. 2007 QE	Mar. 07 to Sept. 07 (4-2)	June  07 to Sept. 07 (4-3)	Mar. 07 to Sept. 07	June  07 to Sept. 07
1	2	3	4	5	6	7	8
1. Multilateral	35,337	36,058	37,067	1,730	1,009	4.9	2.8
2. Bilateral	16,062	15,841	16,659	597	818	3.7	5.2
3. IMF	0.00	0.00	0.00	0	0	-	-
4. Export credit	7,083	7,747	8,505	1,422	758	20.1	9.8
5. Commercial Borrowings	41,722	47,729	51,770	10,048	4,041	24.1	8.5
6. NRI Deposits (long-term)	41,240	42,603	43,643	2,403	1,040	5.8	2.4
7. Rupee debt	1,946	2,032	2,081	135	49	6.9	2.4
8. Long-term debt (1 to 7)	143,390	152,010	159,725	16,335	7,715	11.4	5.1
9. Short-term debt	26,239	28,568	30,791	4,552	2,223	17.3	7.8
10. Total debt (8+9)	169,629	180,578	190,516	20,887	9,938	12.3	5.5
R: Revised QE: Quick Estimates

The share of long-term debt in total external debt at end-September 2007 was 83.8 per cent (US$ 159.7 billion).  Component-wise, under long-term debt, multilateral and bilateral debt rose by US$ 1.0 billion and US$ 0.8 billion to US$ 37.1 billion and US$ 16.7 billion, respectively.  Export credit outstanding showed an increase of US$ 0.8 billion, reaching US$ 8.5 billion.  The stock of commercial borrowings at US$ 51.8 billion and NRI deposits at US$ 43.6 billion were higher by US$ 4.0 billion and US$ 1.0 billion, respectively, as compared to those at the end of the preceding quarter.  Rupee debt remained broadly at the same level of around US$ 2 billion as at the end of previous quarter.  

Commercial Borrowings accounted for the highest share of 27.2 per cent in total external debt outstanding at end-September 2007.  As a proportion of the total external debt, Non-Resident Indian deposits accounted for 22.9 per cent of the total debt at end-September 2007, followed by multilateral debt at 19.5 per cent and bilateral debt at 8.7 per cent.  Export credit and Rupee debt accounted for 4.5 per cent and 1.1 per cent, respectively.  

In respect of short-term debt, the coverage is now made more comprehensive, with the inclusion of 

(i) suppliers' credits up to six months and

(ii) investment by Foreign Institutional Investors (FII) in short-term debt instruments.  As at end-September 2007, short-term debt stood at US$ 30.8 billion, accounting for 16.2 per cent of the total external debt.   

The total external debt at end-September 2007 considered in terms of sovereign debt  (US$ 51.3 billion) and private debt (US$ 139.2 billion) was in the ratio of 26.9 : 73.1.  While the foreign exchange reserves cover for external debt rose to 130 per cent at end-September 2007, debt servicing as a proportion of gross external current receipts (debt-service ratio) has declined from 9.9 per cent in 2005-06 to 4.8 per cent in 2006-07 and further to 4.5 per cent during April-September 2007.   

The major currency of denomination in India's external debt portfolio continued to be US dollar, accounting for 52.8 per cent of total external debt at end-September 2007.  

The complete text of this report is available on the Ministry of Finance Website:http://www.finmin.nic.in

The release on balance of payments data for July-September 2007 is available on the Reserve Bank 
of India's website: http://www.rbi.org.in

External debt growth driven by commercial borrowings and short-term liabilities increases reserve coverage and lowers debt-service ratio. External debt at end-September 2007 was US$190.5 billion, rising 5.5% over the quarter and 12.3% since March 2007; the increase mainly reflected higher commercial borrowings, NRI deposits, multilateral debt and expanded short-term debt coverage (including suppliers' credits up to six months and FII short-term instruments). Long-term debt comprised 83.8% of the total, sovereign-to-private ratio was roughly 26.9:73.1, reserve cover rose to 130% and the debt-service ratio declined.